The majority stake in the mining firm is being acquired by a consortium that comprises of South African and Chinese entities led by the Industrial Development Corporation of South Africa and Hebei Iron & Steel.
Commenting on the divesture Rio Tinto chief financial officer Guy Elliott remarked that Palabora, though a good business, not longer remained consistent with the company’s strategic portfolio.
"Selling our stake reflects Rio Tinto’s policy of continually reviewing our portfolio to generate best value for shareholders.
"During the transition we will continue to run the operations efficiently and safely," added Elliott.
The agreement is currently awaiting approval from regulatory bodies in South Africa and China and is expected to be concluded in four to six months.
Rio Tinto is a mining and processing entity that mainly produces aluminium, copper, diamonds, thermal and metallurgical coal, uranium, gold, industrial minerals (borax, titanium dioxide and salt) and iron ore.
